Open Letter to the Vermont Public Service Board with comments in reply to critics

An Open Letter to the Vermont Public Service Board: It’s Time to Say “Enough”

Defiance of a duly constituted governmental authority clearly falls outside of any defensible conception of the “general good of the state;” in fact, the only acceptable response to this behavior is outrage.

Just days after appearing before the Board, Entergy openly declared to Judge Murtha: “In the event that the PSB ultimately disagrees, Plaintiffs will be forced either to cease operating or, if they defy the PSB by continuing to operate, to face the prospect of a diminished credit rating, a loss of crucial employees, and a demerit in the PSB’s consideration of Plaintiffs’ petition for a new CPG.” (p. 9, Plaintiff’s Reply in Further Support …,” emphasis added)

Entergy’s insolence is glaring. Not ashamed about violating its basic social contracts, the company’s first concern is that its defiance might entail higher borrowing costs (the likely consequence of a “diminished credit rating”). This is the corporate equivalent of a Mafioso’s: “I’d shoot ya, but I don’t want your blood on this here new suit.”

Were this an isolated instance, one might overlook it. Alas, no. It is the most recent statement of a company which, since coming to Vermont, has repeatedly proven that its sworn word means nothing.

In 2002, as part of the purchase of Vermont Yankee, Entergy signed an MOU stating, among other things: : “Each of … ENVY and ENO expressly and irrevocably agrees: (a) that the Board has jurisdiction … to grant or deny approval of operation of the VYNPS beyond March 21, 2012 and (b) to waive any claim each may have that federal law preempts the jurisdiction of the Board to take the actions and impose the conditions agreed upon in this paragraph to renew, amend or extend the ENVY CPG and ENO CPG to allow operation of the VYNPS after March 21, 2012, or to decline to so renew, amend or extend.” (Section 12)

The MOU also expressly states in paragraph 16 (1): “This Memorandum of Understanding is governed by Vermont law and any disputes under this Memorandum of Understanding shall be decided by the Board.”

Yet, on April 18, 2011, Entergy filed a complaint in federal court which states: “”ENVY and ENOI respectfully pray that this court: A. Issue a declaratory judgment … that … federal law preempts the Defendants from requiring ENVY and/or ENOI to receive legislative OR REGULATORY APPROVAL OF A CPG in order to operate ….” (Emphasis added) p. 32 (See also, “Memorandum of law in support of plaintiff’s motion for preliminary injunction,” p. 14)

Since then, Entergy has repeatedly changed its position vis-à-vis the Board’s authority as convenience and circumstance dictate. Entergy’s verbal pas de deux hoodwinked Judge Murtha. Obviously neglecting the plain language I just quoted, Murtha declared: “Entergy’s suit does not maintain that the resting of jurisdiction in the Board to grant or deny a CPG for continued operation is preempted.” (p. 94)

If Entergy had any respect for its own word or for the rule of law, it would have presented whatever case it thought it had and resolved this controversy in the appropriate venue: namely, before the Public Service Board, as required by the explicit terms of the MOU. Instead, Entergy took it upon itself effectively to decide its own case against the State in absentia, blaming the legislature for breach of contract. Having thus absolved itself from any further obligation under the MOU, Entergy petitioned the federal court as though it had never agreed that “any disputes under this Memorandum” were to be “decided by the Board.”

This is renegade behavior by an outlaw organization, not a corporate citizen acting in the “public good.” Clearly, Entergy is out of compliance with its MOU. This issue remains unresolved and deserves the Board’s attention.[1]

Between these 2 bookends, there is the equally appalling instance of two high-ranking ENVY officials presenting patently false testimony to the Board, and then leaving the record tainted until they were caught in the act by leaks in the pipes they swore under oath did not exist. Further examples of Entergy’s patently unconscionable behavior are provided in NEC’s brief and in the State’s federal court filings, so there is no need to repeat them here.

Just as we give no quarter to the bullying and self-serving behavior of criminals, so too we should give none to a corporate bully demanding permission to operate in our State, while threatening to ignore its laws.

It’s time for the Board to say clearly, but simply: enough. We will not tolerate an enterprise which breaks its word, lies under oath, and threatens to defy the legitimate authority of the State.

The Board should flatly deny Entergy any of the permits it is seeking, and given the reasons enumerated, it clearly has unpreempted authority to do so.

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If the Board accepts the argument above, there is clearly no need to address the more technical issues of the relationship between the different sections of Vermont law and the Board’s authority to grant a permit. Nevertheless, I want to address a few of the specific arguments being made at this time.

The first concerns the question of the Board’s authority to permit storage of spent fuel beyond March 21. The history of Vermont’s enactments makes legislative intent entirely clear.

Section 6501a was written in 1977, 9 years before the first dry casks were licensed by the NRC, and its language is too sweeping to apply solely to dry casks in any case: “No facility for deposit, storage, reprocessing or disposal of spent nuclear fuel elements or radioactive waste material shall be constructed or established in the state of Vermont unless the general assembly first finds that it promotes the general good of the state and approves, through either bill or joint resolution, a petition for approval of the facility.” (emphasis added)

Entergy’s March16 brief attempts to introduce a distinction between “constructing a facility” and “storing SNF within an already-constructed facility,” (pp. 2-5) but no such distinction could have occurred to the legislature in 1977. Entergy’s logic assumes that the legislature was first able to predict that the dry cask interim storage system for spent fuel would be generically licensed (as it was in 1986) and then assumes that by using the word “facility” the legislature was confining itself only to the concrete pad on which the dry casks are placed. To explicitly state the argument is to refute it since it is implausible on its face. (Indeed, the argument would be totally impossible if dry cask storage was not yet contemplated in 1977. I don’t know when the idea of dry casks was first introduced. Keep in mind that the Vermont legislature is many things, but it is not an assembly of nuclear engineers).

By adding a subsection specifically relating to “low-level” radioactive waste years before the passage of Act 74, however, it is clear that the legislature did NOT confine itself to any one technology or storage method, or even to any one form of radioactive waste. The presence of the words “or radioactive waste material,” and the added exception for the “construction or establishment after July 1, 1980 of a low-level, temporary storage facility” in (b) makes it perfectly clear that what was contemplated in subsection (a) is ANY radioactive waste and ANY installation. Dry casks are used ONLY to store spent nuclear fuel.

Since Entergy’s artificial distinction collapses of its own weight, the word “facility” must mean what ordinary dictionaries define it to mean: namely: “An installation, contrivance, or other things which facilitates something; a place for doing something:” (Wikipedia) or “something (as a hospital) that is built, installed, or established to serve a particular purpose” (Merriam-Webster) Dry casks, in and of themselves, readily fit both definitions. It follows that the only plausible interpretation of section 6501’s language encompasses BOTH the dry casks AND the pad on which they are placed as parts of a “facility.”

In 1979, the legislature added an exemption to its previous rule, specifically written for the owners of Vermont Yankee: namely, the Vermont Yankee Nuclear Power Corporation. Given this exemption (6505) and the plain meaning of section 6501a, it is impossible to extend Judge Murtha’s reasoning concerning later laws to these earlier statutes. First, legislative history applicable to a law passed in 2005 has no relevance to an enactment passed more than a quarter of a century earlier; yet, it is clear that the judge’s decision was based exclusively on legislative history. Second, the specific exemption for the old owners in the earlier law clearly shows specifically in any case, that radiological concerns about Vermont Yankee were not part of the legislature’s intent in section 6501.

Section 6522 was carefully written in 2005 as a coherent whole, but obviously the legislature could not foresee that a federal judge would overturn a portion of its language. The meaning of the statute as written is clear on its face: taking notice of the earlier statutes just referenced, the legislature gives Entergy permission to request a CPG for storage until March 21, and explicitly denies its permission for storage after that date, pending a second vote. By declaring the second vote unconstitutionally preempted, Judge Murtha interrupted this coherent scheme, though not its clear original intent.

The effect of removing the second vote, while NOT removing the earlier statute, is to return us to the status quo ante. As we saw earlier, section 6501a requires a legislative vote before ANY facility can be “established.”

Previously, Act 160 required the Board to await legislative approval for reaching a “final order or certificate of public good” (section 248(e)(2)), but Judge Murtha overturned this provision. Thus, the Board CAN decide this matter at its discretion, but any affirmative decision would still require Entergy to obtain the legislative vote specified in section 6501a before the CPG could be effective.

Since continued operation of Vermont Yankee requires new dry casks, since dry casks are clearly within the broad definition of the word “facility” as used in section 6501a, and since Judge Murtha has declared only one sentence of section 6522 c(4) as preempted under the Atomic Energy Act, Vermont Yankee’s continued operations must thus depend on BOTH a non-preempted vote of the General Assembly under section 6501a AND the granting of a new CPG by the Public Service Board. This is the only plausible interpretation of all of the disassociated parts left by Judge Murtha’s removal of a key section of an otherwise coherent legislative enactment. Indeed, in reaching this conclusion, Entergy and I are in agreement: “what was removed by the District Court decision with respect to SNF storage was simply the legislative-approval overlay that had been imposed by the now invalidated provision of Act 74, 10 V.S.A. § 6522(c)(4).” (p. 5)

Finally, in regards to the discussion of the relationship between section 814 and the specific declarations about operations and nuclear waste in Entergy’s CPGs and in the law, I find NEC’s, VPIRG’s, CLF’s, and VNRC’s briefs convincing, and add only that Entergy’s appeal to “the principle of fairness” (p. 6), in light of the record noted at the outset here, brings to mind the old joke about chutzpah (“Please, your honor, have mercy on an orphan….”)

[1] Judge Murtha’s decision clearly misstates the facts of this part of the case, and in any event, attempts to resolve only the issue of whether or not Entergy waived its right to bring the federal suit. Entergy cannot unilaterally decide whether it is in compliance with the MOU as it has attempted to do by sidestepping the Board.

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The first part of this has now been published in the Brattleboro Reformer and VT Digger. Here are comments written in reply to critics of the Digger piece:

Douglas Hutchinson’s questionable analogy entirely misses the key point I was making in my op-ed. The MOU itself contains a clause, quoted above, which calls for the resolution of disputes by the PSB. Entergy chose to simply ignore that clause.

The remainder of the argument he presents is the argument that Entergy SHOULD have made to the PSB, BEFORE it opted to take its complaint into federal court. Whether or not it’s valid was for the PSB to decide, NOT for Entergy or Mr. Hutchinson to decide unilaterally. Contract disputes are decided by third parties, and in this case, to an EXPRESSLY NAMED third party (namely, the PSB) NOT by the parties to the contract. Failure to present the issue to the proper authority indisputably constitutes a breach of the MOU, and is completely independent of any question about the substance of the disputed issue.

If Mr. Hutchinson and others want to acknowledge that point, and THEN engage the substantive argument, I am more than happy to rebut their substantive arguments. Until we get the first issue cleared up, however, I see no point in pursuing the substance of the dispute.

Similarly, the question of waiver of preemption is complex, but it is not for Entergy to decide by itself, especially not AFTER having signed the waiver. Presumably, had Entergy thought it impermissible to sign such a waiver, however, it would not have done so. Any challenge could and should have been brought in 2002, not AFTER Entergy had enjoyed the full fruits of the bargain. In fact, the evidence shows that Entergy went out of its way in 2002-3 (in response to the New England Coalition) to DEFEND the waiver and its own integrity in signing it. We can all see for ourselves where that got us.

Finally, Judge Murtha’s decision is final (pending appeal) concerning those aspects of this very complex case about which he has ruled. In fact, however, he chose to rule quite narrowly, preempting originally all or parts of 2 and now 3 subsections of Vermont law. It’s certainly true that legally, with regards to those 3 subsections, Murtha’s ruling stands until overruled.

Meanwhile, however, the judge also remanded the case to the PSB, which, other than the now-preempted sections must decide a variety of issues in accordance with Vermont law and its own precedents. The Board did so in part yesterday, declaring in response to Entergy’s petition for a declaratory judgment that Entergy does NOT have valid permits, that general administrative law provisions do not fill the gap, and that the PSB cannot decide matters of legislative intent for which it lacks authority (one of which was subsequently the subject of Murtha’s injunction).

The legal situation is thus considerably more complex than Professor Kreis’s version of it a few weeks ago, precisely as I suggested in my comments on Kreis’ column at the time. See: http://vtdigger.org/2012/03/06/kreis-vermont-yankee-and-the-rule-of-law/

Ray Emery’s comment ignores a whole slew of important facts. Most pertinently, had neither Act 74 nor Act 160 been passed, Section 6501a of Vermont law, written in 1977 ALREADY required legislative approval before constructing a facility to store radioactive waste in Vermont. Judge Murtha did not overturn it, so it stands as Vermont law. Overturning it would require a new federal case, since the judge based his decision exclusively on legislative history that occurred more than a quarter of a century after this law was passed.

Vic Hudson should read the judge’s decision more carefully (assuming he’s read it at all). It is far more specific than just the “waste storage issue.” Specifically, the State is enjoined from “addressing the storage of spent fuel under the authority of Vermont Statutes Annotated, title 10, subsection 6522(c)(2) and from bringing an enforcement action, or taking other action, to enforce subsection 6522(c)(2) to compel Vermont Yankee to shut down because the “cumulative total amount of spent fuel stored at Vermont Yankee” exceeds “the amount derived from the operation of the facility up to, but not beyond, March 21, 2012.”

The waste issue is addressed in far more places than this one subsection (and the second, part of 6522c(4) preempted previously). Specifically, the judge addressed neither the statutory restrictions of subsection 6501a, nor the restrictions in Entergy’s existing CPG, nor subsection 6522c(5), which states: “(5) Compliance with the provisions of this subchapter shall not confer any expectation or entitlement to continued operation of Vermont Yankee following the expiration of its current operating license on March 21, 2012. Before the owners of the generation facility may operate the generation facility beyond that date, they must first obtain a certificate of public good from the public service board under Title 30 “

There are still plenty of legal questions remaining, left unresolved by this latest inept decision. Nevertheless, before Mr. Hudson lectures me on this point, as I said to Mr. Hutchinson above, Judge Murtha’s decision – WHERE IT’S RELEVANT – is the law until it’s overturned. The issues which the judge failed to address still require resolution, many by the PSB and other Vermont authorities.

See the whole discussion at http://vtdigger.org/2012/03/19/greenberg-an-open-letter-to-the-public-service-board-its-time-to-say-enough/#comment-31620